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Opinions of Friday, 20 January 2017

Columnist: Joe Asamoah

Boosting power generation in Ghana with LNG

A schematic of an FSRU (top) lying next to an LNG Carrier (bottom) A schematic of an FSRU (top) lying next to an LNG Carrier (bottom)

By Joe Asamoah

Natural gas, the cleanest fossil fuel, can best be transported over long distances from one location to another with no pipeline connectivity in the form of liquefied natural gas (LNG).

However, what is LNG? LNG is natural gas (predominantly methane, CH4) that has been converted to a liquid form for easy storage or transportation. LNG, a clear, colourless and non-toxic liquid, forms when natural gas is cooled to -162ºC.

During the cooling process, the volume of gas shrinks 600 times, making it safer and easier to store and ship. LNG will not ignite in its liquid state. This unique property of the fuel makes it convenient for transporting big volumes from one place to another.

Strategic fuel for Ghana

It is an undeniable fact that the relatively reliable current power supply in the country may be short-lived; if steps are not taken to inject significant financial resources and painstaking planning into the system. For Ghana, LNG can be regarded as an important part of a long-term solution to her power crisis.

This is based on a holistic assessment of the energy mix of the country, her power needs in the medium to long term, and its availability in the sub-region and internationally.

No matter how one views power generation in Ghana, the key challenge is predominantly financial, although there are occasional technical difficulties.

There is no gainsay denying the fact that there is considerably huge cost involved in generating electricity with light crude oil with a view to shoring up generation by hydro.

On account of this, the use of natural gas or LNG is a worthwhile choice. Incidentally, LNG is not produced on the shores of Ghana, but has to be imported.

However, what has been done to bring LNG into Ghana, taking into account the fact that the natural gas available for power generation in the country in the short to medium term is very limited? To put things into perspective, Ghana’s natural gas reserves currently stand at about five trillion cubic feet (tcf), while that of Nigeria (a giant in the West African Hydrocarbon Province) is about 190 tcf.

Interestingly, the State of Qatar leads the global LNG trade, mainly due to its significant endowment with 900 tcf non-associated natural gas.

On a lighter note, such resource largesse and prudent management thereof, account for the fact that it is currently constructing air-conditioned stadia for the 2022 FIFA World Cup Extravaganza in Doha!

The potential for supplying LNG to Ghana

Efforts are being made by Quantum Power Ghana Gas, a subsidiary of Quantum Power Services, a Pan-African industrial investment group focused on power generation and other related infrastructure and commodities, to invest US$500 million in a Floating Storage and Regasification Unit (FSRU) offshore Tema.

The FSRU will be used for the importation of LNG, storage and re-gasification for ultimate delivery of gas via sub-sea pipelines to off-takers in Tema.

FSRU is a facility which when installed, can receive LNG and make natural gas available in the country after regasification.

The FSRU is expected to deliver over 1.75 million tonnes of LNG per year to the Tema area. The pertinent question is, why does an FSRU appear to be the additional facility the country needs, even after the Gas Processing Facility at Atuabo has already come on stream?

In the absence of established onshore LNG regasification plant, which arguably will come at a significant cost, it is prudent to take a recourse to the novel FSRU, which could feed gas into the existing West African Gas Pipeline system within a limited time.

The FSRU will complement whatever gas is received from Nigeria and what the Atuabo Gas Processing Facility is able to feed into the pipeline system. Further, with an FSRU, Ghana can access LNG from multiple sources.

Quantum Power Ghana Gas has signed a collaboration agreement with Golar Energy to provide the project with the required FSRU, including certain technical, engineering, design and construction services.

According to the Chief Executive of Quantum Power Ghana Gas, Mr Don Ackah, the FSRU is to be sited offshore the eastern port city of Tema, and will provide gas directly to the Volta River Authority.

Bermuda-headquartered Golar LNG will provide the FSRU. In addition, talks are also underway with French oil services firm Technip to construct sub-sea and onshore pipeline networks to deliver gas to Tema, he revealed.

The FSRU, currently being constructed by Samsung Heavy Industries in South Korea, will have the capacity to deliver at least 250 million cubic feet of LNG per day, or 1.75 million tonnes per annum.

He added that Quantum Power Ghana was in talks with global oil firms, including??? BP???, for the supply of natural gas (Kpodo 2014).

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